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BT says Oftel decision will cause technical hazards

by Sylvia Pennington

Oftel's decision to force British Telecom to give rival service providers access to its local telephone lines within two years (see Newswire 6 July), has started a heated debate about whether this will cause major technical problems in local exchanges.

Released yesterday, Oftel's report, Access to Bandwidth: Proposals for Action, recommended that alternative infrastructure providers be allowed to upgrade BT's local loop in order to provide their own services to customers. This requires them installing their own equipment in BT's exchanges, something BT fundamentally opposes.

In a statement, BT said the move to unbundle the local loop was unnecessary and raised "significant operational, technical and security issues". Instead, the provider believes that offering wholesale prices to other broadband providers will provide sufficient competition and customer choice.

Senior analyst at Schema, Robin Duke-Woolley, backed up BT's stance. While the strategy of allowing rival providers access to BT lines was appealing in theory, it could prove difficult to implement, he cautioned.

BT's exchanges were not designed to store termination equipment from multiple vendors and having several players doubling up on infrastructure would not be cost effective, Duke-Woolley said.

In addition, BT was likely to roll ADSL out first to profitable business areas, making it less attractive for rival vendors to undertake upgrade work, he added.

"It's going to be interesting to see which areas BT chooses as the first areas to roll out. If BT chooses the most profitable areas, what's left for the others?" he noted.

Unsurprisingly, the findings were welcome news for BT's competitors. MCI Worldcom issued a statement applauding the decision, in which it stated it would be "at the forefront of the drive" to ensure the initiative was implemented as quickly as possible.

"Unbundling the local loop will significantly increase the range of access options for British customers that want to make use of high speed Internet, data and voice transmission technologies," MCI Worldcom UK managing director Michael Butler said.

"We are disappointed that BT has expressed a view that option two is unnecessary. It is the fundamental driver for competition. They say that full unbundling raises operational and technical issues, but if implementing competition proves 'too difficult', we might as well all go home," he added.

Yankee Group director Chris Lewis dismissed BT's reservations about opening up the infrastructure: "Whenever we have a new market opening up, technical and security issues are the first to be raised."

But Lewis said operators that wanted to offer local loop services would face a number of non technical obstacles, including finding early adopters that are willing to pay for the service.

"They will need a fair number of users to break even on it," he said.

A spokeswoman for Oftel said further consultation would iron out such issues as they arose.

"We don't foresee any major problems," she said.

Competing operators are expected to have access to the local loop by July 2001, following technical trials.

Duke Woolley said the two year timetable was "quite rapid".

"ADSL technology is almost sorted out but there are still some technical issues," he said.

"It's a challenging timetable but we're keen to get this process out," the Oftel spokeswoman said.